1)Stop believing the market is logical –The market is primarily moved by both perception and emotion far more than reality or logic. Trade what you see, not what you think you should or want to see. There’s a reason why most people stink at trading as they fail to understand that markets are often illogical and influenced by emotion rather than reality. Whenever possible, try to adopt and hold an “opportunistic” mindset rather than a dominant bullish or bearish posture.
2)Concentrate your holdings –If you have more than 5 to 10 positions in your portfolio, you are hindering your performance without even realizing it. With the availability of ETFs now, you can diversify as much as you need. Likewise, even if the best of environments, you probably should only be able to find a handful of really good opportunities that offer the most upside with the least amount of risk. Frankly, if you are able to find more than that, then you really don’t understand what it means to find a true low risk/high reward opportunity!
3)Stop chasing performance –The very best opportunities before you now are in stocks and sectors that no one is talking about or even knows to look at. Likewise, stop looking to chase the hot hand of others. The media and far too many investors are always focused on what is working well now and who is making the most money while the best opportunities are frequently elsewhere. Go where the market is quiet and which no one is interested in and you’ll find more opportunity. In addition, being patient when you don’t find anything that really fits your eye is more than half of the battle.
4)Turn off the noise –Information may be the world’s most precious commodity, but 99% of the information at your disposal is not. In today’s age of real-time information, opinions, analysis, etc. it is my strong belief that information overload and noise is hindering performance far more than it is helping. The first step is to stop watching all TV and to place severe restrictions on all media. In addition, to perform better this year you must stop wasting time on seeking out advice and opinions that only serve to confirm what you really want to hear in order to justify your positions. If anything, what time you spend in social media should be devoted to looking for ideas that challenge your positions and/or offer unique insight you can really learn something from.
5)Understand your limitations and strengths –Not everyone can be a short-term trader nor do they have to be. The mistake that many make is copying another’s strategy that doesn’t fit them nor one they truly understand. This is why they also readily abandon those strategies when the pressure is on which really hurts performance. So, figure out how much time you can devote, what skills you already have, and formulate a strategy that works best for you based on that. Keep in mind also that the best strategies are often so simple that you should be able to explain how they work to those who aren’t intimately involved in the markets.
6)Accept you will make many mistakes –Those who learn how to minimize the damage when they are wrong and who readily own up to the mistakes they make will do far better over the long haul. Making mistakes is a part of this game, but knowing how to handle them is everything. Likewise, if you attach your ego to your portfolio’s performance you are destined for failure. The market absolutely loves to kill those with big giant egos and who look for the markets as a place to prove how smart they are. Markets chew and spit out these folks routinely for good reason and they will continue to do so at every available opportunity.
7)Become a specialist, not a jack of all trades –You don’t have to know everything about everything to do well. In fact, those who focus on a specific setup, chart pattern, program pattern, industry group, or even just trade only one ETF frequently perform far better than those who know a lot about a lot of things but have no real discernible edge. I run into people all of the time who know a great many things, but are not an expert of any one thing and that is to their clear disadvantage. So, find something that interests you more than anything else and concentrate all of your time and focus on that one thing. That path will lead you to developing an clear edge that will provide huge profits to you down the line.
If you follow these 7 tips, I’m confident you will see a meaningful improvement in your bottom line results this fall!
::N.B : This article is taken from the net and been modified as for our members for better understanding.::
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